The Nonpartisan Leader Newspaper, October 28, 1915, Page 6

T TR © R B e T srr———— PAGE SIX THE NONPARTISAN LEADER A Glimpse of Some Rural Credit Systems e decay. The vitality and soundness of a nation depends upon the economically secure condition of the agriculturist of that nation. Exploit and crush the farmer and you have undermined the corner-stone of civilization. Permit the omnipresent trust to bleed and sap the life out of the agricultural class and you endanger the American Republic and threaten an untimely senility to our national existence. g In his “The Rise of Christianity,” the German writer, Kalthoff, speaking of the farmers in ancient Rome, says: “The noble Roman becomes a relentless exploiter of the poor peasant. He is a speculator on a grand scale and menaces -the State.” 7 Speaking of the result of this treatment accorded the peas- ants Tiberius Gracchus says: “The wild- beast has its cavern and its den; every one of them has its place of refuge. But those who are called the lords of the earth have nothing left but light and sunshine. There is not a stone that they can call their own and lay their weary heads to rest on.” ' b History further informs us that every effort to revive the dying Roman world completely failed. It failed because by kill- ing off the independent, land-owning farmer they thereby under- mined and finally destroyed the very foundation of popular gov- ernment. For, as David Lubin says, the state may be compared to a tripod of which one of the supports is labor, another commerce, and the third agriculture. The first two are mainly urban and constltute the pro- gressive elements of society. The farmers, largely rural, usually are conservative. And a reasonable degree of conservativeness is essential to strike a balance with the sometimes too radical elements. But with the farming element killed off there was no balance left. It is, therefore, of the highest importance that the state governments, especially in sections of the country where. agri- culture predominates, give careful and serious attention to the economic needs of the farmer.. And indeed the National govern- ment should give the subject aggressive consideration. In the past our national and state governments have devoted entirely too much attention to helping “infant industries,” by grants, loans, advances and concessions, to manufacturing and trans- .portation concerns to the neglect of the agricultural interest of the country. The wealth of the nation primarily eminates from the farm and a policy that neglects to give the farmer efficient service is suicidal in the extreme. It is sometimes objected that to make possible more credits for the farmer simply puts the farmer that much more in debt. But this argument will not hold good when both a long-time, low interest rate §ystem is taken in connection with a better market- ing system. With a better marketing system the farmer would get more profits for his produce and would require less credits. a NATION that fails to protect its farmers is destined to By Otto T. Monroe As the profits of the farmer increased the amount: of credits re- quired would decrease until finally none would be needed. One objection urged to the Raiffeisen credit system of Ger- many is that it accepts as members of the co-operative banks only land owners. This, it is pointed out will not help the tenant, who has no land. But there are other systems that have rendered valuable service, especially to tenants. The one we have in mind is not a new and untmed plan, but one that has been well tested and proved successful. That is the plan. in effect in New Zealand. The government of New Zealand issues and sells bonds, the ° income from which is loaned to settlers at 5 per cent interest for periods varying from 20 to 36% years, depending on the character of security. This money is loaned on the amortization plan. For example, a $1,000 20-year loan at 5 per cent-interest would all be paid off in twenty annual payments of $80.24 each. The first year the interest would be $50 and the amount of amortization would be $30.24.. The second year the interest would be $48.48 and the amortization would be $31.76. So that each year the interest decreases and the amortization increases, yet the total never exceeds $80.24. In the twentieth year the interest is $3.82 and the amortization is $76.42. This plan is also in effect in Australia, Islands and several Provinces of Canada. Under this system the economic saving is great. The over- the Philippine bead charges are small compared to those of private money lend- ing agencies. New Zealand, for instance, sells her honds-in the open money market as low as 3 and 3% per cent. And yet she nets on an average in recent years of more than $300,000 annually. The possibilities for such a system in this country is beyond the dreams of the most optimistic. New Zealand with a popula- tion of only 1,100,000, about half the population of the state of Virginia, loaned to its settlers, with their farms as security, over $60,000,000 at the rate of 5 per cent mtelest and for periods .. varying from 20 to 86% years. That amount was loaned to 32,738 settlers, one hundred less than the number of white tenants in the .State of Virginia. The average.loan was $2,000 and already 45 per cent.of the loans have been repaid. Only 33 out of the 32 783 failed to make their payments. Tt will be recalled that North Dakota has a law that permits the State to loan funds obtained from school lands, but it has not worked very well, possibly due to the fact that it is in the hands of its enemies instead of its friends. As long as-those who profit by loaning money execute the laws any law that will inter- fere with their business will get little attention. Oklahoma has such a law and has loaned to farmers since 1907 more than $4,000,000. These loans are now made for only five years and it is planned to change the time to ten years. = The only way to get good results from such a system is to have the matter in the hands of the friends and beneficiaries of the system. This can done only by the farmers gettmg control of the State government. Are the Bank Wreckers Busy Agazn P By Aug. Wolversen An.other sensational chapter of |upon its cash reserve placed it in North Dakota Finance is disclosed in | rather an embarrassing position un- a petition filed and granted by Judge|less it could immedxately negotiate J. A. Coffey of the Fifth Judicial Dis-|some of its notes and securities. A trict, Stutsman County, and in an|great deal of the paper held by the action Before that Court in which | bank consisted of second and third Michael Murphy, receiver of the Me- | mortgages, which - though perfectly dina State Bank is plaintiff and L. B.|good and sound would require con- Hanna, E. J. Weiser and the First|siderable time to convert into cash National Bank of Fargo, a corpora-|at their face value. tion, are made defendants. The receiver sets up that the de- _ Medina State Bank. " This story of the closing of the which they were interested were cred- Medina State Bank by the State Bani |itors of the bank to the amount of examiner at Medina, Stutsman Coun-|Several thousand dollars anc_‘i» holders ty, in January, 1914, although care- of its stock as collateral security. fully suppressed by the Press of the| Naturally the directors of the Me- State, has finally come -to. light|qdinn State Bank turned to them in through the filing of a petition by its | this critical time of the bank’s need receiver, Michael .Murphy, in which|and at a conference between the he petitions the Court for an order |pank’s officers and L.-B. Hanna and autorizing him to institute and prose-|E. J. eWiser, directors of the First cute an action to recover assets of National Bank of" Fargo, an arrange- the bank approximating $25,000 or{ment was made whereby the officers $30,000. of the Medina State Bank returned to .The Medina State Bank was up un- | their sorely pressed institution not til January 1914 a going Banking in-|with low bowed head and stoopmg stitution - performing the regular -houlders but - lighter of _heart and " functions of the Banking business. | with assurance that suecor was close‘ About this time several heavy drafts at hand. : : : ghort time prior to the closing of the Medina State Bank, L. B. Hanna and E. J. Weiser, directors of The First National Bank of Fargo, agreed with the officers of . the Medina State Bank that they would send: a man out to fendants and financial concerns in Tucker who made an mvest.lgatlon of The petitioner sets forth that a and reported favorably back to Hanna and Weiser, and that immediately after Tucker made his report to ‘Hanna and Welset, "Gordon H, Nesbit came out to the bank and, selecting notes and securities belonging to the Medina State Bank, which the peti- the Medina State Bank to investigate the value of its assets, and agreed if his report was favorable that they, Hanna and Weiser, would fumish and | gregate "between $25 000 and 3:) 000 supply the bank with £unds to meet | carried them awav any run on it and to pay all its| creditors and deposxtors in the usual ; course. of business and to. keep the bank open and running as a gomg institution. That' L. B. Hanna and E J. Welser agreed that immediately upon receiv-| ing ‘the report they would send Gor- don H. Nesbit, who was the: Cashier | of the First Natlonal Bank of Fargo, ‘fur out to Medina for the purpose of se-|jeg lecting from the assets: of the Medina State Bank such notes and -assets as’ he might deem advisable and suffi- cient to protecb ‘and secure - Hanna | and Wexser m advancmg the money‘ The, thlthn goes on to state‘ ‘That after receiving, takmg away and’ retammg the said assets of ‘the _said Medina State’ Bank; aforesard, trary permitted the State Bank Ex the assets and condition of the bank ° ‘tioner, Michael Murphy, believes ag- Al ot fort]\“ : or for any purpose, but:on the con- ~ 1 3 o &